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Barbara Salyers v. Ge Money Bank

October 25, 2011

BARBARA SALYERS, PLAINTIFF,
v.
GE MONEY BANK, DEFENDANT.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendant GE Money Bank's (GEMB) motion to dismiss and motion in the alternative to stay. For the reasons stated below, the motion to dismiss is granted and the motion to stay is denied as moot.

BACKGROUND

In 2005, Plaintiff Barbara Salyers (Salyers) allegedly opened a Lowe's credit card (Card) account and Capital One allegedly issued and financed the Card. Salyers also allegedly elected to purchase an optional debt cancellation feature for the Card called "Payment Protection," which in the event of involuntary unemployment, disability or other protected event, would cancel certain debt on the Card. In March 2007, the account for the Card was allegedly transferred from Capital One to GEMB. Cardholders were allegedly sent a notice of the transfer and of any changes in the terms and conditions for the Card. In April 2007, GEMB allegedly sent Salyers a new GEMB-issued Card and GEMB's credit card agreement (Card Agreement). Salyers then allegedly activated her GEMB-issued Card. Salyers also allegedly elected to participate in GEMB's debt cancellation program called "Account Defender." The Account Defender program, like the Payment Protection program, would allegedly cancel certain debt on the Card in the event of certain qualifying events, such as unemployment or disability. Salyers contends that in February 2009, she became involuntarily unemployed, which is a qualifying event for the Account Defender program.

Salyers allegedly contacted GEMB's customer service department regarding her Account Defender benefits, but was allegedly told to wait thirty days before submitting her claim for benefits. After waiting thirty days, on May 15, 2009, Salyers allegedly filled out and mailed a Benefit Request Form to GEMB. On August 19, 2009, Salyers allegedly received a letter from GEMB stating, "On 7/8/09 we received your request to file for a debt cancellation benefit. We have not received a response from you." (Compl. Par. 72).

In response to this letter, Salyers allegedly made additional attempts to fax and mail her Benefit Request Form, but neither was received by GEMB. On July 13, 2010, Salyers allegedly received a letter from GEMB stating that GEMB would not process her Benefit Request Form because Salyers did not submit a benefit request within one year of the date of her involuntary unemployment. Salyers brought the instant action and includes in her amended complaint a claim brought under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq. (Count I), a claim brought under the Illinois Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count II), a claim for unconscionability (Count III), a claim for breach of the implied covenant of good faith and fair dealing (Count IV), and a claim for unjust enrichment (Count V). GEMB contends that Salyers agreed to arbitrate the claims in the instant action and GEMB moves to dismiss the instant action, and moves in the alternative to stay the instant action.

LEGAL STANDARD

In ruling on a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(3) (Rule 12(b)(3)), a court should "constru[e] all facts and draw[] reasonable inferences in favor of the plaintiffs." Faulkenberg v. CB Tax Fran. Sys., LP, 637 F.3d 801, 806 (7th Cir. 2011). A court ruling on a Rule 12(b)(3) motion is not "obligated to limit its consideration to the pleadings [or to] convert the motion to one for summary judgment if the parties submit evidence outside the pleadings." Id. at 809-10 (internal quotations omitted)(quoting Contl. Cas. Co. v. Am. Natl. Ins. Co., 417 F.3d 727, 733 (7th Cir. 2005)). When parties have entered into a contract and have agreed to arbitrate disputes arising from that contract, dismissal pursuant to Rule 12(b)(3) is appropriate. See Contl. Cas. Co., 417 F.3d at 733 (stating that the Court has "held dismissal [where both parties to a contract have agreed to arbitrate a dispute] to be appropriate, . . . and, when the question has arisen, [the Court has] held that such dismissal properly is requested under Rule 12(b)(3)").

DISCUSSION

GEMB argues that this action should be dismissed pending individual arbitration between Salyers and GEMB or in the alternative the action should be stayed. The Card Agreement contained the following arbitration agreement (Arbitration Provision) provided in bold capital letters:

ANY PAST, PRESENT OR FUTURE LEGAL DISPUTE OR CLAIM OF ANY KIND, INCLUDING STATUTORY AND COMMON LAW CLAIMS AND CLAIMS FOR EQUITABLE RELIEF, THAT RELATES IN ANY WAY TO YOUR ACCOUNT, CARD OR YOUR RELATIONSHIP WITH US ("CLAIM") WILL BE RESOLVED BY BINDING ARBITRATION IF EITHER YOU, WE OR LOWE'S ELECTS TO ARBITRATE.

(Koehler Decl. Ex. A 14). GEMB argues that under the Arbitration Provision, Salyers is obligated to first arbitrate the claims in the instant action.

A party seeking to dismiss an action based on an agreement to arbitrate claims must establish: (1) that the parties have entered into a valid arbitration agreement, and (2) the asserted claims fall within the scope of that agreement. Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909 (7th Cir. 1999). The Federal Arbitration Act (FAA) provides that "[a] written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The Supreme Court has stated that the FAA "establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Faulkenberg, 637 F.3d at 808 (internal quotations omitted)(quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, ...


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